Monday, June 19, 2006

Uniform Pricing

Slashdot links to a Variety article discussing iTunes' desire to use a flat-rate pricing scheme, like the ones for digital music, for sales of movies ($9.99 each). It seems the industry is looking for tiered pricing, like the one for DVD pricing claiming that they "can't be put in a position where we lose the ability to price our most popular content higher than less popular stuff."

There's been a bunch of debate as to whether iTunes' uniform-pricing scheme makes sense for music, and basically the same arguments would fit here. I've discussed this before. It seems to make sense only as a marketing ploy; other reasons that might be used to support uniform-pricing don't seem to hold water. The other point worth noting is that the argument between the MPAA and Apple is not about $9.99/each versus $5-$15/each, but rather $9.99/each versus $10-$20/each. So it's not just a disagreement about the tiering of pricing, but also the level of pricing.

Of course, another form of movie sales uses uniform pricing: theater-going. This is also a peculiar instiution; Barak Orbach and Liran Einav take a stab at explaining that pricing scheme as a result of the "peculiar veritical integration" that exists in film distribution.


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